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Sunday, November 16, 2008

Donald Bradley Turn Dates for 2009

Amanita Forecasting has announced the Bradley Turn Dates for 2009 and the remainder of 2008. Amanita Forecasting uses the "Bradley Siderograph" and astrology to predict major market turns. It does not predict the direction.

The Bradley siderograph (more information) was developed in the 1940's by Donald Bradley to forecast the stock markets. Bradley assigned numerical values to certain planetary constellations for every day, and the sum is the siderograph. It was originally intended to predict the stock markets. William Eng, a noted technical analyst, singled out the Bradley as the only 'excellent' Timing Indicator in his book, "Technical Analysis of Stocks, Options, and Futures" (source: Astrikos).

Arch Crawford uses the Bradley to write his newsletter, the Crawford Perspective. On November 9, 2008 Peter Brimelow wrote:

Over the year to date through October, Crawford Perspectives is up a breathtaking 36% by Hulbert Financial Digest count, vs. negative 32.94% for the dividend-reinvested Dow Jones Wilshire 5000.

Over the past 12 months, Crawford is up 6% vs. negative 36.3% for the total return DJ-Wilshire 5000.

People like to follow what is working. If Arch Crawford was the top, big name market timer this year and he predicts a major rally into mid 2009, then this can be a self fulfilling prophecy as followers can move the market.

Before you get too excited about Crawford's predictions, Brimelow continued:

This is not a flash in the pan ... well, not completely. Over the past five years, the Crawford letter has achieved an annualized gain of 3.1%, vs. 0.8% annualized for the total return DJ-W.

But over the entire period that the HFD has monitored Crawford, the letter has achieved only a 4.7% annualized gain, vs. 8.8% annualized for the total return DJ-W 5000.

This is because, every once in a while, Crawford's hot hand turns into a cold claw.

For example, Crawford was one the 10 worst-performing letters of 2006.

What it all means is you can get great short-term market timing performance with anything from coin flipping to astrology, but few, if any "market timing systems" can beat the markets over the long term. Most of us rely on asset allocation and careful stock selection to match or beat the markets slowly over the long haul. Bear markets such as we are in now are the price we pay to get superior long term returns. For more, make sure you read my articles: